Milk wars has in­dus­try in up­roar, se­nate in­quiry hears

Townsville Bulletin - - Investor -

THE sim­ple ri­tual of wan­der­ing to the cor­ner shop to buy a litre of milk will leave many Aus­tralians scratch­ing their heads this week­end.

As the su­per­mar­ket price wars show no sign of abat­ing, any­one used to fresh milk on their ce­real in the morn­ing will need to con­sider more than just the fat con­tent. There’s the price, l oy­alty t o f arm­ers, con­ve­nience and even the fear of drink­ing UHT milk for life to think about.

In­de­pen­dent re­tail­ers are be­ing charged about $ 3.50 for two litres of milk, while ma­jor su­per­mar­ket chains ob­tain the same quan­tity for about $ 1.50.

Al most 1 0 0 d a i r y p r o - duc­ers, shop own­ers and or­gan­i­sa­tions have lodged sub­mis­sions to a Se­nate com­mit­tee look­ing into the heavy dis­count­ing among su­per­mar­ket chains.

Coles slashed the price of its home brand milk to $ 1 a litre in Jan­uary, forc­ing ri­val Wool­worths and smaller su­per­mar­ket chains to do the same in or­der to keep cus­tomers churn­ing through the check­outs.

But in­dus­try ex­perts warn that Coles and Wool­worths, which con­trol about three quar­ters of the su­per­mar­ket sec­tor, are ef­fec­tively sub­si­dis­ing dis­counted prod­ucts by rais­ing prices on the ma­jor­ity of their prod­ucts.

The Se­nate hear­ings heard a pro­tracted milk price war could dam­age the dairy in­dus­try, lead to short­ages of fresh milk, higher prices and long-life milk be­ing pushed on con­sumers.

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